Different repayment roads for GM, Chrysler

DETROIT - General Motors Co. and Chrysler L.L.C., took dramatically different stands yesterday on repaying the billions each received over the last year in federal bailout funds.

GM plans to pay all of its $6.7 billion in government loans by the end of June, chairman and chief executive officer Ed Whitacre Jr. said. The quarterly installments will begin this month with a $1.2 billion payment, he said.

But Chrysler, now known as Old Carco L.L.C., filed a Chapter 11 bankruptcy reorganization plan in which the company said it planned on giving nothing back to the government for its $3.7-billion claim, which comes from loans under the Troubled Asset Relief Program. But the plan, filed in New York, said the company will repay some other lenders in full.

GM received $52 billion in aid from the government as it navigated bankruptcy protection earlier this year. Of that total, $45.3 billion was converted into equity, giving the government a 61 percent stake in the automaker. That leaves the $6.7 billion to be repaid.

Whitacre said GM has no timetable yet for an initial public offering of stock, which would be necessary for the government to recoup the rest of its investment in the company. He made the remarks during a roundtable with reporters in Detroit.

The GM chairman took over as CEO on Dec. 1 after Frederick A. "Fritz" Henderson abruptly resigned following differences with the board over the direction of the company.

In the reorganization plan, Chrysler said "the U.S. Treasury will receive no recovery" of its remaining TARP claim.

The Treasury gave Chrysler a bridge loan of $4 billion in January. Of that, the U.S. now has a $3.7 billion claim, according to court documents.

The company said creditors classified as "other secured claims" of $20.6 million will get an estimated 100 percent recovery, while a recovery for unsecured claims is "undetermined." Unsecured claims are those not back by collateral.

Recovery for unsecured creditors will come from any proceeds of litigation with Daimler AG, the German company that owned Chrysler until it was sold in 2007 to Cerberus Capital Management of New York. Chrysler has identified about 25,000 claims in that category, worth about $25 billion, according to court documents.

The plan winds down Chrysler's 25 units that remained in bankruptcy after a sale of its most valuable assets to Fiat SpA that closed June 10. The company isn't operating any businesses and the plan liquidates all remaining assets.